On January 1, 2016, Price Company and Sean Company had condensed balance sheets as follows: Price Sean
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Question:
On January 1, 2016, Price Company and Sean Company had condensed balance sheets as follows:
Price | Sean | ||
Current assets | $ 280,000 | $80,000 | |
Noncurrent assets | 360,000 | 160,000 | |
Total assets | $640,000 | $240,000 | |
Current liabilities | $ 120,000 | $40,000 | |
Long-term debt | 200,000 | -0- | |
Stockholders' equity | 320,000 | 200,000 | |
Total liabilities & stockholders' equity | $640,000 | $240,000 |
On January 2, 2016 Price borrowed $240,000 and used the proceeds to purchase 90% of the outstanding common stock of Sean. This debt is payable in 10 equal annual principal payments, plus interest, starting December 30, 2016. Any difference between book value and the value implied by the purchase price relates to land.
On Price's January 2, 2016 consolidated balance sheet, noncurrent liabilities should be:
Related Book For
Fundamentals of Advanced Accounting
ISBN: 978-0077862237
6th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
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